China’s Consumer Price Index (CPI) Rises on the Back of Increasing Food Prices

China’s key inflation gauge consumer price index grew at its fastest pace in six months in October as food prices rose, while factory prices beat market expectations to accelerate to a 55-month high, fanning concerns of inflation. The October CPI data ended previous drops in the past five-consecutive months starting from 2.3 percent in April, when the CPI hit its highest level since July 2014, according to the National Bureau of Statistics (NBS) on Wednesday [9 November 2016]…Full Article: The Global Times Nov 2016

Key Point

In October 2016, Chinese food prices increased 3.7%, an increase from September’s rate of 3.2%.

ChinaAg Comments

In November 2016, according to an analyst at the Suning Institute of Finance, throughout 2016 prices have increased for ginger (by 300%), some ingredients for traditional Chinese medicine (by 80%), cotton (by 20%) and sugar (by 20%). In addition, from October 2015 to October 2016, according to the NDRC, Chinese wholesale and retail garlic prices have increased 90% and 67.9%, respectively.

In January 2016, National Bureau of Statistics (NBS) adjust the country’s Consumer Price Index (CPI) calculation by reducing the contribution of food, tobacco and alcohol to the CPI basket by 3.4%. In addition, China’s CPI will also now include floricultural products (i.e. flowers), and will change the base year from 2010 to 2015. Prior to the 2016 change, the price of food comprised roughly one-third of China’s Consumer Price Index (CPI), while pork accounted for nearly 3% of China’s CPI. China’s pork prices generally increase along with the country’s inflation rate. In this past, this “pork price cycle” has typically occurred every three to four years. Prices also vary according to the time of the year, with prices dipping during fall and winter months.